my test file also has a W-2 with $50K (for the primary), I checked both ways... with and without box 13 checked and it is calculating the MAGI and deductible IRA contribution amount correctly in both cases if the primary taxpayer is making the IRA contribution. With box 13 checked the deduction is limited.
your example seems very straightforward, mine has all sorts of stuff going on like conversions, distributions, annuities, etc. and it looks right. the inherited IRA distribution is for the spouse.
it doesn't seem like the program should care who the inherited IRA distribution belongs to.
maybe Turbotax needs another problem ticket submitted.
